Well, It Finally Happened… Now What?

Baron Rothschild famously stated, “Buy when there’s blood in the streets, even if the blood is your own.”

Well, there’s blood everywhere on Wall Street.

Though, almost all of it is to be expected.

But one of the sectors bleeding the most has potentially the most sky-high promise...

Bitcoin.

The world’s largest cryptocurrency just underwent the most significant event in the industry, a reward-halving.

This is something we’ve been prepping for over a year.

But Bitcoin slid 18% from April 8 to its low on April 19.

Well, a few weeks ago, I outlined that selloffs in the lead-up to the reward halving are common.  

So, now what?

There Is Blood

Over the past several weeks, the crypto universe has been gutted.

And then those guts were kicked around like so much spaghetti Bolognese left in the streets.

For even the most ardent cryptocurrency cheerleaders, it was a true test of their mettle.

The losses in recent weeks have varied…

Shares of the largest publicly traded holder of Bitcoin, the Grayscale Bitcoin Trust (GBTC), tumbled 17.5% from their 52-week high on April 8 to April 17.

The newly formed iShares Bitcoin Trust (IBIT) saw the exact same retreat.

Meanwhile, Coinbase (COIN) shares plunged 25% from their 52-week high on March 25 to April 19.

Michael Saylor’s Microstrategy (MSTR) – and my friend Marc Lichtenfeld’s favorite crypto play to short – sunk 43.4% from its 52-week high on March 27 to April 17.

And shares of Marathon Digital (MARA), the world’s largest publicly traded crypto miner, declined 42.5% from their near-term peak on March 28 to April 17. Not to mention, shares are currently down more than 51% from their 52-week high of $34.09 set on February 28.

We also saw significant pullbacks in CleanSpark (CLSK), Grayscale Ethereum Trust (ETHE), Riot Platforms (RIOT), and others.

In total, we can see the ETFs held on slightly better than Bitcoin. Meanwhile, crypto exchanges, miners, and Bitcoin buyers fared worse.

But let’s be realistic here…

Not only were these pullbacks to be expected…

They are to be celebrated!

Second Time Around

For those who have been sitting on the sidelines waiting for a moment to dip their toes into the world of crypto…

For those looking for another chance to add to an ongoing position…

For those who wanted to diversify their crypto stock portfolio, but felt the market got a little overheated…

Now’s a fine time to make a move.

It’s the season of second chances.

And that’s one of the great things about Bitcoin, crypto markets, and the cyclical/seasonal trading that I specialize in: there are always second chances.

All of these assets move in cycles and waves. And right now, we’re nearer to the trough than the crest.

Let me put it this way…

After the 2020 reward halving, shares of the Grayscale Bitcoin Trust rose from $10 at the start of May to a peak of $58.22 by February 2021.

That’s a gain of 482.2%!

Following the 2016 reward halving, they fared even better… skyrocketing 2,854.9% over 18 months by December 2017!

Microstrategy shares soared 963% from May 2020 to their peak in February 2021!

Shares of Riot rallied 6,637.2% from the start of May 2020 to their peak in February 2021!

And shares of Marathon Digital screamed 18,444% from the start of May 2020 to their peak in November 2021!

Now, do I think Marathon and Riot have the potential to see that sort of run again this time around? Probably not. Shares of both those crypto miners were insanely cheap in 2020 following the COVID bear market collapse.

But I’d definitely be looking for them – as well as the other options - to re-test 52-week highs, as well as set new ones.

Prepping for the Next Leg Higher

I’m going to reiterate something I’ve said before…

Bitcoin has been the best-performing asset for a decade and a half.

And not by a little… but by astronomical sums.

That means every investor’s portfolio MUST have some exposure to crypto.

You’re making a mistake if you don’t.

There are new all-time highs in the months ahead. As I’ve outlined before, if Bitcoin’s reward halving trend holds true, we should see $128,500 by the end of 2024. Then the rally will continue in 2025 to around $165,000 or more.

The great thing about our current crypto investing environment, no longer do you need to open a bunch of different wallets to gain exposure. You can do so through your traditional brokerage account or an IRA. For example, the U.S. Securities and Exchange Commission gave the green light to 11 Bitcoin ETFs in January. And they’ve rapidly amassed significant Bitcoin holdings on top of the companies I listed above.

There’s blood in the streets.

That’s traditionally been the sign to buy.

And in crypto, a little more red goo is gushing out than in other sectors.

Bargain hunting like I’m paying with Kohl’s Cash,

Matthew